AMALGAMATED TRANSIT UNION v. SUPERIORCOURTOFLOS ANGELESCOUNTY

Filed 2/28/07

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

STORY CONTINUED FROM PART I..

4. Contrary to the Unions contention, federal cases

do not hold that an assignment carries with it the

assignors right to sue in a representative capacity.

The Unions press the argument that an assignment carries with it the right of an assignee to sue in a representative capacity, asserting that Vermont Agency and other federal cases have so held. They have not. Vermont Agency and other federal cases merely apply the ordinary principle that the assignee of a claim has standing to assert the injury in fact of the assignor. (Vermont Agency, supra, 529 U.S. at p. 773.) Vermont Agency held that a private individual (a qui tam relator) has standing to maintain a suit in federal court on behalf of the United States under the False Claims Act, even though the qui tam relator has suffered no cognizable injury in fact for Article III standing purposes. (Id. at pp. 768, 772-773.) The court found an adequate basis for the qui tam relators standing in the doctrine that the assignee of a claim [the qui tam relator] has standing to assert the injury in fact suffered by the assignor [the United States]. (Id. at p. 773.) It regarded the False Claims Act as effecting a partial assignment of the Governments damages claim, so that the United States injury in fact suffices to confer standing on [the qui tam relator]. (Id. at pp. 773-774, fn. omitted.)

Vermont Agency stands for the proposition that the assignee of a claim has standing to assert the injury in fact suffered by the assignor a proposition with which we fully agree. The courts reference to representational standing on the part of assignees (Vermont Agency, supra, 529 U.S. at p. 773)refers only to the assignees representation of the assignor, that is, the assignees standing to assert the assignors injury in fact not to any right in the assignee to represent someone other than the assignor. In short, Vermont Agency does not suggest that a person with an injury in fact merely because he or she is authorized by statute to seek relief for others as well as himself or herself may assign his or her procedural right to sue in a representative capacity to someone else.[1] In effect, this would permit an assignor to transfer causes of action he or she does not own to someone else. Any such right would turn the law of assignment on its head.

B. The provision of Proposition 64 stating that representative claims

may be pursued only if the claimant complies with Section 382

of the Code of Civil Procedure means that claims must comply

with class action procedures.

The Unions contend Proposition 64, an initiative measure approved at the November 2004 general election, does not require class certification of representative actions brought under the UCL. Their argument is based on the text of the proposition, which states that a person may pursue representative claims only if the claimant . . . complies with Section 382 of the Code of Civil Procedure (section 382). (Bus. & Prof. Code, 17203.) Since its enactment in 1872, section 382 has stated that a person may sue for the benefit of others either (1) when the question is one of a common or general interest, of many persons, or (2) when the parties are numerous, and it is impracticable to bring them all before the court . . . . (Code Civ. Proc., 382.) According to the Unions, the compli[ance] with Section 382 required by Proposition 64 can only mean that the plaintiff must demonstrate that it is a plaintiff having the capacity to sue as a representative plaintiff in compliance with the standards set forth in CCP  382. We are compelled to disagree.

A voter initiative such as Proposition 64 is construed using the familiar principles governing statutory construction. (Horwich v. Superior Court (1999) 21 Cal.4th 272, 276.) The fundamental purpose . . . is to ascertain the intent of the lawmakers so as to effectuate the purpose of the law. [Citations.] (Ibid.) To determine intent, we begin with the language of the statute, but it is a settled principle that statutory language should not be given a literal meaning if doing so would result in absurd consequences that were not intended. The   intent prevails over the letter, and the letter will, if possible, be so read as to conform to the spirit of the act. [Citations.]   (Ibid.) A statute is read with reference to the scheme of law of which it is part and in light of the electorates intent. (Robert L. v. Superior Court (2003) 30 Cal.4th 894, 901.) When language is ambiguous, we consult   other indicia of the voters intent, particularly the analyses and arguments contained in the official ballot pamphlet. [Citations.]   (Ibid.) In short, the task of construing a voter initiative is simply to interpret and apply the initiatives language so as to effectuate the electorates intent. [Citation.] (Ibid.)

Adhering to settled principles for construing a voter initiative, we find the only possible conclusion is that compli[ance] with Section 382 means compliance with class action procedures. The intent of the lawmakers in this case, the voters is evident from the most cursory review of the information presented to the electorate to inform the voting on Proposition 64. For example:

        The Ballot Measure Summary in the Voter Information Guide prepared by the Secretary of State for the November 2, 2004 election explains What Your Vote Means. [2] It states that a yes vote on Proposition 64 means that a person pursuing such [unfair competition] claims on behalf of others would have to meet the additional requirements of class action lawsuits. (Guide, supra, ballot measure summary of Prop. 64, p. 6.) It states that a no vote means that a person could bring such a lawsuit without meeting the additional requirements of class action lawsuits. (Ibid.)

        The Official Title and Summary of Proposition 64, prepared by the Attorney General, states that the initiative statute: Requires private representative claims to comply with procedural requirements applicable to class action lawsuits. (Voter Information Guide, supra, title and summary of Prop. 64, p. 38.)

        The Analysis by the Legislative Analyst repeatedly refers to class action requirements. Thus:

        The background section of the legislative analysis states:

Currently, persons initiating unfair competition lawsuits do not have to meet the requirements for class action lawsuits. Requirements for a class action lawsuit include (1) certification by the court of a group of individuals as a class of persons with a common interest, (2) demonstration that there is a benefit to the parties of the lawsuit and the court from having a single case, and (3) notification of all potential members of the class. (Guide, supra, analysis of Prop. 64 by Legislative Analyst, p. 38.)

        Describing the Proposition 64 proposal, the legislative analysis states:

This measure makes the following changes to the current unfair competition law: [] Requires Lawsuits Brought on Behalf of Others to Be Class Actions. This measure requires that unfair competition lawsuits initiated by any person, other than the Attorney General and local public prosecutors, on behalf of others, meet the additional requirements of class action lawsuits. (Guide, supra, analysis of Prop. 64 by Legislative Analyst, pp. 38-39.)

The Unions point out that Code of Civil Procedure section 382 itself contains no class certification requirements and authorizes representative suits that are not class actions, as well as class actions. (See Residents of Beverly Glen, Inc. v. City of Los Angeles (1973) 34 Cal.App.3d 117, 129 (Beverly Glen) [non-profit corporation had standing to represent its injured members in suit to set aside a conditional use permit; [i]t may also be true that while all class suits are representative in nature, all representative suits are not necessarily class actions].)[3] We do not suggest otherwise. The question, however, is what the electorate meant when it said that a person may pursue representative claims under the UCL only if the claimant . . . complies with Section 382 of the Code of Civil Procedure. The Secretary of States official voter information guide leaves no doubt what the electorate meant, and this court is not free to reach a different conclusion.

The Unions protest that the text of Proposition 64, including its Findings and Declarations of Purpose, says nothing about the intent to require class certification in UCL representative suits. Indeed, the text refers only to compli[ance] with Section 382. This does not assist the Unions, because it shows the language of Proposition 64 is ambiguous. Section 382 is a general statute, authorizing suits by one or more . . . for the benefit of all.[4] Depending on the context, sometimes compliance with section 382 means class certification is required; sometimes it means an organization may represent its injured members, such as in Beverly Glen; and sometimes it means something else, such as that one trust beneficiary may maintain a representative action on behalf of other beneficiaries. (Bowles v. Superior Court (1955) 44 Cal.2d 574, 587.) The ambiguity requires us to consult   other indicia of the voters intent, particularly the analyses . . . in the official ballot pamphlet. [Citations.] (Robert L. v. Superior Court, supra, 30 Cal.4th at p. 901.) As we have seen, consulting the official ballot pamphlet completely eliminates any ambiguity. The voters intended to amend the UCL to require a private person initiating a UCL lawsuit to comply with procedural requirements applicable to class action lawsuits (Guide, supra, title and summary of Prop. 64, p. 38), and we are not at liberty to conclude otherwise.[5]

DISPOSITION

The order to show cause is discharged. The Unions petition for writ of mandate and/or prohibition or other appropriate relief is denied and this courts stay of the trial courts order is vacated. The real parties in interest are entitled to recover their costs.

CERTIFIED FOR PUBLICATION

BOLAND, J.

I concur:

RUBIN, J.

COOPER, P. J., Concurring and Dissenting

I respectfully dissent from a portion of the opinion of the majority in this case. In specific, I disagree with the conclusion of the majority that the [two labor unions that represent mechanics and transit operators (Unions)] do not have standing under [the Labor Code Private Attorneys General Act of 2004 (PAGA)] or [the unfair competition law (UCL)] to assert the rights of members who have not assigned their recovery rights to the Unions. The majority takes the position that the right to bring a representative suit is not itself a cause of action (or any other form of property) that is owned and therefore assignable. Unlike causes of action, which arise from obligations or from the violation of property rights of the owner, the right to sue on behalf of others is a procedural mechanism created by the Legislature to facilitate the prosecution of similar claims owned by many different persons. Authorization to bring a representative suit is conferred by the Legislature, and persons authorized to bring suit have no power to assign that authorization to a third party. The majority further argues that the assignment in this case purporting to transfer the right to sue in a representative capacity is not a transfer of an injury in fact from assignor to assignee that confers standing on the assignee . . . . Therefore, they conclude that even with a valid assignment, the assignee may not transfer his right to sue in a representative capacity on behalf of current and former employees. I am unable to locate any authority which compels these conclusions urged by the majority, nor does there seem to be a compelling policy or other reason to reach that result.

The majority characterize the Unions contention as depending upon the mistaken premise that a legislative grant of the procedural right to bring a representative action is a type of property, like a cause of action, that can be owned and transferred. I believe that this entire approach to the analysis is mistaken. The mistake is to discuss the right to bring a representative action as being a property right in any aspect. One does not own or have legal title to the ability to bring a representative action. A representative action is simply a procedural device created by the legislature to allow the prosecution of certain claims. Accordingly, I will hereafter refer to the ability to bring a representative action, not the right to do the same. Thus recast, I posit that the only qualification required, is that the party bringing the representative action meet whatever requirements are set forth by the legislature with respect to that particular case. If, by virtue of an assignment, a Union meets those specifications, then the Union has the ability [nee right] to pursue the cause.

Witkin advises that an assignment may be of either a bilateral contract or of a chose in action, and that most of the common law restrictions on assignability were eliminated by the provisions of the Civil Code. (1 Witkin, Summary of Cal. Law (10th ed. 2005) Contracts, 707, p. 794.) A chose of action is the right to recover money or other personal property by a judicial proceeding and they are assignable when they arise out of an obligation or out of the violation of a right of property. (Civ. Code, 954, 1458) A cause of action for breach of contract is an assignable chose in action. (Trubowitch v. RiverbankCanning Co. (1947) 30 Cal.2d 335, 339.) Non-assignable rights are those founded upon wrongs of a purely personal nature, such as slander, assault and battery, negligent personal injuries and other such torts to the person or reputation. (1 Witkin, Summary of Cal. Law, supra, Contracts, 727.)

The general rule in California which allows assignment of the right to recovery money or other personal property within the meaning of Civil Code sections 953 and 954 grants the assignee all of the rights and remedies possessed by the assignor for its enforcement, subject, however, to the defenses which may be urged against the assignor. The enforcement of the assignors rights by the assignee depends upon the rights of the assignor. (Teater v. Good Hope Dev. Corp. (1942) 55 Cal.App.2d 459, 462.)

I agree however, with the majority that the UCL requirement that a person pursuing relief on behalf of others must both meet the standing requirement and [compl[y] with Section 382 of the Code of Civil Procedure and meet the additional requirements of class action lawsuits. The recent amendments to the UCL accomplished by Proposition 64 engrafts class action requirements onto UCL cases, transforming them from representative actions into formal class actions. As such, they must now meet the requirements of Californias class action statute.^[6] By its terms, Proposition 64 explicitly prohibits any private-party invocation of representative standing unless the party both 1) shows that he or she has standing and 2) complies with Code of Civil Procedure Section 382 -- which in this context means that the party must comply with general class-certification principles. (Bus. & Prof. Code, 17203, 17535.)

The policy objective of Proposition 64 to weed out frivolous actions was met by adding the demand that the representative and each member have suffered loss of money or property as a result of unfair competition. However, an assignee acquires the injury in fact when a valid assignment is accomplished. The assignment described in this action does no damage to this policy objective. It does not create a frivolous action, it merely allows the injured assignor to grant an assignee the ability to pursue the claim on his or his behalf. The only dubious objective accomplished by eliminating the right to assign such a cause of action is to simply limit the identity of the parties that can functionally maintain the action without regard to the merits of the case.

In the UCL context, the appropriate question is to be decided therefore, is whether the Unions, as an assignee of a party [otherwise fully qualified] can be the class representative in a Business and Professions Code section 17200 case. As noted, Proposition 17203, as amended, withdraws the standing of persons who have not been harmed to represent those who have. By virtue of the assignment, the Unions meet the first requirement and thus have the standing to sue.^[7] Furthermore as the California Supreme Court stated in Californians For Disability Rights v. Mervyns, LLC (2006) 39 Cal.4th 223, 232, footnote 4, the general language of section Code of Civil Procedure section 382 has been construed as authoriz[ing] class suits in California and also as permitting associations to sue on behalf of their members.

The second requirement for a class action is that all of the class members in a properly certified class must satisfy whatever standing requirements would be necessary to maintain a suit in their own right. (See, e.g., Collins v. Safeway Stores, Inc. (1986) 187 Cal.App.3d 62, 73 [Each class member must have standing to bring the suit in his [or her] own right. [Citations.]) The only limitation that would result from this requirement is that the Unions cannot, as the assignee of a single injured plaintiff, represent a class made up in part of admittedly uninjured parties.[8]

Labor Code section 2699, subdivision (a) allows an aggrieved employee on behalf of himself or herself and other current or former employees to bring a civil action to recover civil penalties pursuant to the procedures set forth in Labor Code section 2699.3.[9] Here again, provided the assigning employee has the necessary injuries to be aggrieved, there is no reason why the assignee cannot thereafter pursue that employees claims.^[10] The use of an assignment in this fashion does no violence to the concerns expressed by the legislature when it adopted the requirements that there be an injury in fact or an aggrieved employee.

For the reasons stated above: I concur in the result that by virtue of Proposition 64, the Unions are required to bring actions under the UCL as class actions, however, I dissent from the result that the Unions lack standing to sue for claims under PAGA.

_____________________, P. J.

COOPER

Publication Courtesy of San Diego County Legal Resource Directory.

Analysis and review provided by San Diego County Property line attorney.

[1] It is worth noting that, with respect to the UCL, permitting the assignment of the right to bring a representative suit on behalf of others would effectively circumvent one of the principal objectives of Proposition 64, which was aimed at limiting private enforcement of the unfair competition laws. (See Guide, supra, analysis of Prop. 64 by Legislative Analyst, pp. 38-39.)

[2] Neither party submitted the Voter Information Guide as an exhibit in connection with this writ petition; however, the Unions submitted and rely on the two pages of the Guide containing the text of the proposition. We take judicial notice, on our own motion, of the remainder of the Voter Information Guide. (Evid. Code, 459 [reviewing court may take judicial notice of any matter specified in Evidence Code section 452]; Evid. Code, 452, subd. (h) [judicial notice may be taken of [f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy].)

[3] The Unions also cite Professional Fire Fighters v. City of Los Angeles (1963) 60 Cal.2d 276, 283-284 [union had capacity to sue on behalf of its members in action seeking injunction and declaratory relief; entire action is one such as is contemplated by Code of Civil Procedure section 382] and Weaver v. Pasadena Tournament of Roses (1948) 32 Cal.2d 833, 836-837 [[t]he propriety of representative or class suits has long been recognized in our statutory law as embraced in section 382].

[4] No one would suggest that section 382 authorizes anyone to sue on behalf of others in any instance where there is a question . . . of a common or general interest, of many persons, or whenever it is impracticable to bring numerous parties before the court. (Code Civ. Proc., 382.) But, read literally, that is all section 382 requires. Instead, of course, numerous (and different) rules of law govern who may bring both representative and class suits. Moreover, the voters themselves would not know what compli[ance] with Section 382 meant, without reference to the ballot materials.

[5] The Unions writ petition also asserts that no class certification is required of a representative action brought under PAGA. Because the trial court did not consider this contention, and the real parties in interest have not responded to it, this court will not address it.

1 Proposition 64 amended the provision in section 17204 of the UCL which pertains to private litigants to read: Actions for any relief pursuant to this chapter shall be prosecuted exclusively . . . by any person who has suffered injury in fact and has lost money or property as a result of such unfair competition. Section 17203 was also amended, and now reads, in part: Any person may pursue representative claims or relief on behalf of others only if the claimant meets the standing requirements of Section 17204 and complies with Section 382 of the Code of Civil Procedure . . . .

[7] Business and Professions Code section 17201 provides: As used in this chapter, the term person shall mean and include natural persons, corporations, firms, partnerships, joint stock companies, associations and other organizations of persons. (Emphasis added.)

[8] It is hornbook law that a class action is merely a device to aggregate individual claims that could not have been asserted individually; i.e., it is not intended to permit the class representative to assert claims that the absent class members do hot have. (See e.g., Feitelberg v. Credit Suisse First Boston, LLC (2005) 134 Cal.App.4th 997, 1018; Vernon v. Drexel Burnham & Co. (1975) 52 Cal.App.3d 706, 716.)

[9] Labor Code section 2699, subdivision (a) provides: Notwithstanding any other provision of law, any provision of this code that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency or any of its departments, divisions, commissions, boards, agencies, or employees, for a violation of this code, may, as an alternative, be recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees pursuant to the procedures specified in Section 2699.3.

[10] On the other hand, if at a later date, the California Supreme Court determines that the PAGA claims in this action constitute statutory penalties, the Unions would not be able to pursue the PAGA claims. See, Murphy v. Kenneth Cole Prod., Inc. (2005)134 Cal.App.4th 728, review granted February 22, 2006, S140308.